Suppose that the cross price elasticity of demand between goods Y and Z equals 1.5. Which of the following is TRUE?
A) Goods Y and Z are complements because the cross price elasticity is greater than one.
B) Goods Y and Z are complements because the cross price elasticity is positive.
C) Goods Y and Z are substitutes because the cross price elasticity is greater than one.
D) Goods Y and Z are substitutes because the cross price elasticity is positive.
Answer: D
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Which of the following is not included in a nation's balance of payments?
a. Imports and exports of services. b. International interest and dividend earnings. c. International real estate transactions. d. Changes in a nation's money supply due to a new required reserve ratio. e. All of the above are included in the balance of payments.
The view that changes in the money supply is the primary cause of change in real output and the price level is most closely associated with:
A. Rational expectations theory B. Real business cycle theory C. Mainstream economics D. Monetarism
Mike has been unemployed for over a year. He hasn't looked for a job in the last three months, but he's just started looking for work again. Because Mike started looking for a new job
A) the unemployment rate decreased. B) the working-age population increased. C) the unemployment rate increased. D) the labor force participation rate decreased.